The Reserve Bank of Australia (RBA) handed Narromine home owners timely relief when they cut the official cash rate by 1 per cent on Tuesday. The cut will deliver more than $100 a month in savings for the average home owner in Narromine if the banks pass on the full 100 basis point cut.

So far only the Commonwealth Bank and National Australia Bank have passed on the full cut. The RBA’s decision to lower the cash rate brings it to 4.25 per cent, its lowest level since December 2001.

The RBA’s decision has brought relief to Narromine’s Fiona Walker who bought her first house 12 months ago and said the recent interest rate cuts had been making life easier.

“It is a really big help because it fills the pantry, pays the bills off and lets us buy something decent for the kids at Christmas.” Mrs Walker said

Farmers are also welcoming Rabobank’s decision to lower its rural loan variable interest rate by 1 per cent on December 12.

Borrowers of farm loans have been slow to receive interest rate cuts this year. Kevin Rudd put pressure on the banks to offer relief to farmers by simultaneously cutting their rural loans as they cut their home mortgage rates.

In Parliament on Wednesday the Prime Minister said farmers were playing a critical role in seeing Australia through the global financial crisis.